A Legal Report concerning an outline of Human Settlements and Social housing
November 2021 - By Philip Webster
A Legal Report concerning an outline of Human Settlements and Social housing legislation in South Africa. November 2021.
1/ Interprets the legislative framework regulating “Community Schemes”, which are defined in the Community Scheme Ombud Service Act No.9 of 2011 (“CSOSA”) and “Development Schemes” as defined in the Sectional Titles Schemes Management Act, No. 8 of 2011 (“STSMA”);
2/ Examines the areas of misalignment and the factors that contribute to inconsistencies between the CSOSA and the STSMA; as well as between on the one hand the CSOSA and the STSMA; and on the other hand, other housing legislation and certain policy objectives regarding social housing, as evidenced in Part 3 of the Housing Code;
3/ Identifies limitations, gaps and grey areas that may be used for mapping perspectives of alignment;
4/ Proposes a framework that may be used as a guide to align the CSOSA, the STSMA and social housing human settlements legislation;
5/ Determines if there is a need for over-arching legislation to regulate Community Schemes generally, including social housing within human settlements, notably Enhanced Extended Discount Benefit Schemes (“EEDBS”) and Building New Ground (“BNG”) schemes; and
6/ Recommends a viable legislative approach aimed at addressing underlying legislative shortcomings to enable efficient legislative implementation of social care policy objectives.
1/ Interpretation of the legislative framework regulating “Community Schemes”, which are defined in the Community Schemes Ombud Service Act No. 9 of 2011 (“CSOSA”) and “Development Schemes” as defined in the Sectional Titles Schemes Management Act, No. 8 of 2011 (“STSMA”);
(i) “Community Schemes” or “Schemes” are defined in the CSOSA as:
“Any scheme or arrangement in terms of which there is
shared use of and responsibility for parts of land and buildings,
including but not limited to a sectional title development scheme,
a share block company, a home or property owner’s association,
however, constituted, established to administer a property development,
a housing scheme for retired persons, and a housing co-operative
as contemplated in the South African Co-operatives Act, 2005
(Act 20 No. 14 of 2005) and “scheme” has the same meaning.”
(ii) There is a close alignment between the CSOSA and the STSMA which were both enacted on the same day (notwithstanding certain inherent contradictions in their respective dispute resolution provisions). The STSMA states the administrative functions of the STSMA Advisory Council shall be comprised of employees of CSOS. The Advisory Council reports to the Minister.
(iii) The Community Schemes Ombud Service (“CSOS’) is established, under Section 3 of the CSOSA.
(iv) ’Community Schemes’ covered under other housing legislation each have their own dispute resolution provisions and regulatory regimes.
(v) However, notwithstanding their differing dispute resolution procedures all Schemes are liable to pay prescribed levies to the CSOS, a national public entity listed in terms of the Public Finance Management Act No 1 of 1999, with its executive authority (as stated in the CSOSA) vested in the Minister of Human Settlements (formerly known as the Minister of Housing and referred to as such in the Housing Act of 1997) (the “Act’).
(vi) The Act provides the Minister is “to provide for the facilitation of a sustainable housing development process…”.
(vii) The rational for the establishment of the CSOS, a juristic body, is to:
(a) provide a simple, cost effective and readily available dispute resolution mechanism to assist in resolving all forms of ‘Community Scheme’ or ‘Scheme’ related disputes speedily and in a cost- effective manner;
(b) regulate, monitor and control the provision of sectional titles schemes governance documentation and promote good governance of Community Schemes generally;
(c) take custody of, preserve and provide public access electronically or by other means to sectional titles schemes documentation and other scheme governance documents;
(d) pursue the CSOS functions and enforce the registration of Sectional Title Management Schemes and all other forms of Community Schemes;
(e) ensure the collection of levies in respect thereof such that the CSOS has adequate income and liquidity to perform its functions; and
(f) Provide a resource for social care housing Community Schemes such as Enhanced Extended Discount Benefit Schemes (EEDBS) and ‘Breaking New Ground’ Schemes’(BNGS).
2/ Examination of the areas of misalignment and the factors that contribute to inconsistencies between the CSOSA and the STSMA; as well as between on the one hand the CSOSA and the STSMA; and on the other hand, other housing legislation and certain policy objectives regarding social housing, as evidenced in Part 3 of the Housing Code.
(i) A Community Scheme regulated by the CSOSA comes into existence automatically immediately the developer allocates a unit in the Community Scheme to an inhabitant thereof.
(ii) There is no requirement for registration of the Community Scheme for the Community Scheme to exist.
(iii) However, should the developer wish to facilitate the raising of finance by owners of units in the Community Scheme, particularly social housing developments, the likelihood is the developer will wish to register the development as a Sectional Title Scheme (“STS”).
(iv) Should the developer wish to register the development as a STS, there is a requirement for the developer and/or body corporate (of which all occupants in the STS immediately become members comprising the body corporate) to register the STS under the terms of the STSMA.
(v) The CSOS is entitled to collect levies from any Community Scheme but requires a STS to be registered under the terms of the STSMA if the CSOS is to be entitled to collect additional levies and undertake oversight of the STS in question as provided for under the STSMA.
(vi) Moreover, although individual owners of sectional title units, are not freehold owners of immovable real property with an individual erf number registrable at the Deeds office, they are owners of units of immovable real property within a STS complex which does have a single erf number for the complex as a whole registrable at the Deeds office. In consequence of such membership, each member of the STS owning a unit of sectional title is deemed to be an owner of a unit of real marketable immovable property against which funding may be raised in respect of the sectional title unit owned.
(vii) Herein, in this process, lies the seeds of potential economic misalignment between the CSOSA on the one hand and on the other housing developments, particularly social care housing developments which are Community Schemes, registered as Sectional Title Schemes and thus subject to the terms of the STSMA and the payment of additional levies thereunder.
(viii) While members comprising a Community Scheme will be liable to pay levies to the CSOS under the terms of the CSOSA (whether or not registered as a Sectional Title Scheme) and be entitled to benefit from the dispute resolution procedures thereunder, such members, unless freeholders in possession of a registered erf number, will not have a fundable, marketable and registrable real property asset. However, sectional title owners comprised within a “Development Scheme”, will obtain a fundable, marketable asset by registering their respective sectional title units pursuant to the terms of the STSMA.
(ix) The STSMA defines a “Development Scheme” as follows:
(i) “Development Scheme” means a scheme in terms of which a building or buildings situated or to be situated on land within the area of jurisdiction of a local municipality is or are, for the purposes of selling, letting or otherwise dealing therewith, to be divided into two or more sections”;
(ii) “Scheme” means a development scheme”;
(iii) “Section” means a section shown as such on a sectional plan;
(iv) “Sectional plan”, in relation to a scheme, means a plan approved by the Surveyor-General which-
(a) is described as a sectional plan;
(b) shows the building or buildings and the land comprised in the scheme, as divided into two or more sections and common property; and
(c) complies with the requirements of section 5 of the Sectional Titles Act;
“Sectional Titles Act” means the Sectional Titles Act, 1986 (Act No. 95 of 1986), as amended;”
(x) Consequently, unless the above conditions are satisfied a Community Scheme as defined in the CSOSA, shall not constitute a STS regulated by the STSMA, notwithstanding the liability to pay levies to the Ombud under the terms of the CSOSA.
(xi) Although not registered as a STS under the terms of the Sectional Titles Act, 1986 (Act No. 95 of 1986), as amended, a housing development may, nonetheless, be managed by an unincorporated housing association or by an incorporated housing association subject to the terms of the Companies Act No 71 of 2008 (the “CA”) or any other preferred judicial structure;
(xii) There is no obligation for developments to be managed by way of a Home Owners Association or even subject to the terms of the STSMA or other judicial structure. Even if a housing development has been set up by the developer within a complex in which the owners share undivided rights and obligations in respect of the common parts of the complex in question, there is no obligation to register the development as a STS;
(xiii) Misalignment and potential conflictual rules relating to similar types of housing developments may also occur in those situations in which a community scheme development, managed as an incorporated or unincorporated Home Owners Association development or by way of any other structure, includes Development Schemes comprising registered STS units automatically subject to the terms of the STSMA, while the other parts of the housing development, in question, are governed by home owners association rules or the rules of any other preferred applicable legal structure established for the complex in question.
(xiv) The Housing Code anticipates that social care developments will be registered on the sectional titles register.
(xv) Section 2.2.2 (General Principles) of Part 3 of the Housing Code 2009 describing the financial interventions in respect of Enhanced Extended Discount Benefit Schemes stipulates at Section 2.2.1 entitled ‘Fundamental Principles”:
(i) “Secure individual ownership’- the aim of the EEDBS is to ensure the occupants of public housing stock are provided with the opportunity to secure individual ownership of their housing units”.
(ii) And Section 2.2.2 entitled “General Principles” inter alia stipulates:
(iii) “The occupant may not accept poor quality housing stock and she/he may not be forced to pay for the upgrading /improvement of such housing stock.”
(iv) The Section further provides:
“The authorities must ensure that where applicable, inter alia
- Stands are subdivided.
- Suitable servitudes are in place.
- Town registers and sectional title registers are opened and in place for occupants to obtain individual ownership and title; and
- The in duplum rule of common law must apply, whereby interest owing which exceeds the capital sum may not be recovered, but must be written back.”
(xvi) Section 2.3.2 entitled: ‘Housing Stock Includes’ describes the types of dwellings which may be subject to the EEDBS policy provisions:
(i) “Free standing houses- individual housing units on defined and designated pieces of land;
(ii) Semi-detached houses- housing units that share common walls with their neighbouring units;
(iii) Terraced houses (row houses)- housing that have at least two common walls, usually on either side of the house, with its neighbours;
(iv) Duplex houses- generally referring to housing units that have two dwelling spaces one on top of the other but sharing certain facilities e.g., front doors and entrance ways;
(v) High rise flats- referring to flats/apartments that are more than four storeys high and require elevators;
(vi) Low rise flats-buildings that are less than four- storeys high; and
(vii) Communal housing- institutions/ buildings that share facilities i.e., each household/individual may have its own sleeping quarters but cooking, washing, and socialising facilities are shared between all of the people who live in the building”
(xvii) Part 3 of the Housing Code, entitled ‘Enhanced Extended Discount Benefit Schemes’, in the third paragraph at Section 3.3.3 and sub-titled “Flats, Cluster Homes and Row Houses” inter alia states:
(i) “Public sector owners must be realistic about the possibility of a block being suitable for conversion to sectional title and any such offer must be made in line with the Sectional Titles Act 1986 (No. 95 of 1986); “
(ii) However, notwithstanding such registration of sectional titles, which necessarily entails the automatic application of the STSMA, the dispute resolution rules of the STSMA may conflict with the dispute resolution rules of the development scheme in question.
(iii) For example, Section 5.3 (Resolution of Disputes) of Part 3 of the Housing Code, stipulates as follows:
- All disputes can be resolved through a specially constituted Housing Tribunal (which could comprise of relevant officials, councillors and community leaders with the assistance of legal professional if and when required) through the use of adjudication, mediation or arbitration.
- This tribunal would encourage an occupier to submit evidence that she/he is the legal owner/occupier of a property, which is being purchased or in cases involving family success, the occupier will have to submit evidence that she/he is the correct recipient of the property.
- In either case, tripartite agreements of cancellation and resale can be negotiated through mediation, failing which transfer must be made to the purchaser of record or her/his estate.
- Such a new sale would bear a current date but could be regarded as qualifying for the EEDBS.
- If disputes are not resolved to the satisfaction of all parties, an aggrieved party may approach the Civil Court.”
(xviii) Differences between housing developments registered as Sectional Title Schemes and housing developments subject to management by a home owners association (HOA).
(i) HOA’s are normally established by owners of freehold stand-alone properties who nonetheless wish to share the use of common infrastructure such as security services, roads, recreational facilities, reception areas etc.
(ii) The rules of the HOA may also cover specific matters such as architectural style, paint colours, plants and gardens in the estate premises.
(iii) While these rules may be similar to those provided for under the STSMA, there is no legislation obliging developers to establish a HOA (or other structure) for the estate in question. However, the owners themselves may wish to establish a HOA to better facilitate the management of as well as the sharing of maintenance costs of the shared infrastructure and areas of common use.
(iv) A HOA will have a constitution or Articles of Association regulating: the HOA; how meetings are held; and how Rules are created. The HOA Constitution or Articles may be similar to the Rules of a Sectional Title Scheme (“STS”) but not necessarily the same.
(v) HOA rules operate somewhat like Conduct rules in a Sectional Title Scheme but tend to be less stringent as there is generally more space between the freehold properties in an HOA run estate than the contiguous properties in a typical Sectional Title Scheme.
(vi) Trustees are appointed by the Body Corporate which governs the sectional title scheme and trustees are also appointed by the HOA to implement the rules of a HOA. The trustees are entitled to impose fines in the event members contravene the rules and even take court action, if need be.
(vii) Besides the added likelihood of fines and disciplinary procedures it should also be noted that levies under Sectional Titles Schemes tend to be higher than those imposed by the HOA as the Body Corporate is responsible for the maintenance of the common area costs e.g., security, enhancement (e.g., swimming pools), electricity, water, refuse removal, including insurance thereof associated with the scheme and can impose special levies to cover matters such as new electric gates or fencing.
(viii) While freehold owners of property may delegate some of these costs to trustees under the terms of the HOA rules, the freehold owner is entirely responsible for all costs of home and land owned, including the upkeep of pavement, perimeter walls etc including taking out any necessary insurance.
(ix) Consequently, levies raised by the trustees under a HOA tend to be less than those of the Body Corporate under a Sectional Title Scheme as the freeholder property owner assumes most of the costs of the freehold property and notably the cost of insuring the same.
(x) The Body Corporate appointed trustees under STS developments take into account the dispute resolution procedures provided for under the terms of the CSOSA and STSMA. In view of the close proximity of properties in STS developments, fines and disciplinary procedures are more likely in Sectional Titles Schemes than in properties managed by a HOA or other structures in which there is greater space between the properties being managed.
(xix) Differences between share block schemes established under the Share Blocks Control Act No 59 of 1980 (as amended) (the “SBCA”) and Sectional Title Schemes.
(i) As a Community Scheme, a share block company will be subject to and benefit from the CSOS under the terms of the CSOSA.
(ii) However, there are two essential differences between a share block scheme and Sectional Title Schemes. The two differences relate to on the one hand ownership and on the other hand management.
(iii) In a share block scheme, an individual owns a block of shares in the company. The block of shares in question, entitles the individual to be allocated exclusive use of certain parts of the building, e.g., an apartment, parking bay, garden, etc. However, it is the company, and not the individual which owns the immovable property, the land, buildings and improvements.
(iv) By contrast, in a Sectional Title Scheme, the individual owns a unit which is deemed to be immovable property. The unit is comprised of a section. The section usually consists of an apartment or townhouse as well as a garage and parking facility and an undivided share in the common property.
(v) In a share block scheme, the directors of the company are responsible for the management of the company. In consequence, they are obliged to manage the property subject to the terms of the SBCA as well as the Companies Act 71 of 2008 (“CA”). In practice the directors take all management decisions without being obliged to consult with shareholders, unless consultation is necessary under the terms of the SBCA and/or the CA.
(vi) By contrast Sectional Title owners are automatically deemed to be members of the Body Corporate of the Sectional Title Scheme which in turn is necessarily subject to the terms of the STSMA.
(vii) Consequently, as deemed members of the Body Corporate, Sectional Title owners have a direct say in the management of the scheme in question.
(viii) Sectional Title owners make policy decisions at the annual general meeting and are entitled to issue directives and place restrictions on the activities of the trustees appointed to implement decisions of the Body Corporate in accordance with the provisions of the STSMA.
(ix) Share Block Schemes may be converted into Sectional Title Schemes under the terms of the SBCA.
(x) Section 8A (1) of the SBCA provides that “Whenever shares in a share block company are directly or indirectly offered for sale by a share block developer, the offer shall state in writing whether or not the share block company intends to effect the opening of a sectional title register in terms of section 5 of the Sectional Titles Act, 1971 (Act No.66 of 1971), in relation to the immovable property in respect of which the share block scheme is or is to be operated”.
(xi) A significant advantage for owners converting ownership from shares to a unit in a Sectional Title is that the owner becomes owner of immovable real property rather than merely of shares (albeit shares granting exclusive use of property) in a company.
(xii) Thus, Sectional Title owners have all the advantages of real property ownership which entail the ability to raise a loan against the property with access to relatively inexpensive capital as well as being entitled to participate directly in the management of the property as a deemed Body Corporate member under the terms of the STSMA.
(xiii) Most Community Scheme developments may be registered as an STS if the development includes common property and/or provides for the sharing of services. This will be the case for any Community Scheme and whether or not the scheme in question is managed by way of an incorporated or unincorporated home owners’ association, a share block control act company or is a development scheme known as a EEDBS or BNGS. However, while all such schemes are liable to pay CSOS levies under the CSOSA only Community Schemes registered as Sectional Title Schemes under the STSMA are liable to pay the extra levies due under the terms of the STSMA
3/ Identification of limitations, gaps and grey areas that may be used for mapping perspectives of alignment;
(i) A Government publication notes that by 2011
“Cabinet approved the ‘Comprehensive Housing Plan (CHP) for the Development of Integrated Sustainable Human Settlements (Breaking New Ground [BNG]) that aims, among other things, to eradicate informal settlements in South Africa in the shortest possible time.”
The BNG incorporates principles such as:
- Integrating subsidised, rental and bonded housing
- Providing municipal engineering services at higher level and being applied consistently throughout the township
- Providing ancillary facilities such as schools, clinics and commercial opportunities
- Combining different housing densities and types, ranging from single-stand units to double storey units and row houses.
The CHP provides for programmes that promote the development of the entire residential property market, including the development of low-cost housing, medium-density accommodation and rental housing; stronger partnerships with the private sector; social infrastructure; and amenities.
(ii) BNG housing establishes a modern version of the Reconstruction and Development Programme, otherwise known as RDP housing.
(iii) RDP houses are single-family homes for people earning between R0 to R3,500, paid for by the government. Such housing has tended to be constructed on larger plots of land in the outer areas of cities.
(iv) Unlike the RDP subsidised houses of 20-34 square metres, BNG housing is 40 square metres in size with two bedrooms; a separate bathroom with a toilet, shower and hand basis; a combined living area and kitchen with wash basin; and a ready-board electrical installation where electricity supply is available in the township, to qualifying households earning less than R3,500 a month.
(v) If such schemes are registered on the sectional titles register as provided for under Part 3 of the Housing Code, there could conceivably be a misalignment between the dispute/management provisions of such scheme and the STSMA which applies automatically to registered Sectional Title Schemes.
(vi) EEDBS and BNGS development schemes are generally registered as Sectional Title Schemes, in circumstances in which the development scheme aims to provide the owner of the house with real property title against which relatively cheap funding can be raised.
(vii) Such development schemes if registered as Sectional Title Schemes will be subject to benefits and obligations (levies) of the dispute procedures provided for by the CSOS under the terms of the CSOSA as well as the management rules and regulations provided for under the STSMA.
(viii) If such development schemes are not so registered (notwithstanding the provisions of Part 3 of the Housing Code) but managed as incorporated or unincorporated home owners’ associations or share block control companies, discrepancies and/or even conflict could arise between the management schemes adopted between the home owner’s association or company in question and the provisions of the STSMA.
(ix) The CSOSA aims to provide a streamlined, effective disputes and regulatory judicial regime for all Community Schemes, howsoever established;
(x) CSOSA encourages applicants to resolve disputes by conciliation and provides for the appointment by the Ombud of an Adjudicator to resolve disputes only if agreed conciliation measures have failed;
(xi) applicants may appeal to the High Court in respect of a decision of the Adjudicator only on points of law and not the merits of a matter;
(xii) In contrast to the provisions of the CSOSA which discourages immediate recourse to the courts, housing legislation, including the STSMA and that governing home owner’s association developments, including sectional title EEDBS and BNGS, does not discourage immediate recourse to the courts;
(xiii) different housing legislation establishing different types of Community Schemes have different dispute and regulatory mechanisms to that provided for under the CSOSA;
(xiv) Community Schemes established under housing legislation other than that of the CSOS and STSMA have been established to deal with different housing needs arising in different epochs; and
(xv) the CSOSA is not an overarching legislative regime enabling the CSOS to undertake the following in respect of all Community Schemes: A/ effectively register all Community Schemes; B/ collect levies; C/ execute CSOS administrative functions; and D/ effectively enforce CSOS decisions taken under the CSOSA to all Community Schemes.
4/ A proposed framework that may be used as a guide to align the CSOSA; the STSMA; and other housing legislation, including EEDBS and BNGS developments
(i) The differing dispute and regulatory provisions in the different housing legislation covering differing housing schemes all of which are defined as “Community Schemes” or “Schemes” under CSOSA are often contradictory;
(ii) This contradiction necessarily results in different levels of justice and in certain circumstances delayed justice such that justice is denied;
(iii) As a result of such contradiction, courts rarely insist on applicants in disputes resolving matters under the CSOSA before reverting to the courts;
(iv) The different legislative regimes inhibit applicants from resolving Community Scheme disputes and other regulatory matters under the provisions of the CSOSA; and
(v) The lack of transparency and interaction between the various administrative organs of the different housing regimes inhibit the Ombud from providing the “Service” as provided for under CSOSA to such administrative organs including the registering, overseeing, collection of levies and general regulatory enforcement under the various Community Schemes established under such differing regimes.
5/ The need for one over-arching legislation or separate legislation to regulate Community Schemes in South Africa including rental stock covered under the Enhanced Extended Discount Benefit Scheme (EEDBS) and Building New Ground (BNG) schemes
In view of the matters referred to above, the following observations may be made:
(i) The CSOS established under the CSOSA does not possess the legislative means, capacity and/or resources to provide the Service outlined under the CSOSA to all Community Schemes as defined under the CSOSA;
(ii) Legislative differences and contradictions between the dispute and regulatory provisions between different Community Schemes, prevent the CSOS from providing a unified, effective and streamlined Service as provided for under the CSOSA to all human settlement housing Schemes and their organs of administration;
(iii) Due to 1/ and 2/ above claimants often revert to the courts rather than CSOS; and courts are reluctant to refer matters back to the CSOS in circumstances in which applicants resort to the courts rather than the CSOS, even though the nature of the matter in question ought to be determined by the CSOS; and
(iv) Due to 1/,2/ and 3/ above the CSOS is unable, at times in respect of certain Community Schemes to efficiently: A/ execute CSOS functions, including registration; B/ ensure the comprehensive electronic data update of Community Schemes is maintained ; C/ enforce CSOS decisions; D/ collect levies; E/ undertake efficient oversight of the corporate governance procedures ; and F/ ensure Community Scheme administrative organs notably those operated by Enhanced Extended Discount Benefit Schemes and Breaking New Ground Schemes are effectively administered and if administered, in a financially sustainable manner.
6/ A viable legislative approach aimed at addressing the underlying shortcomings to enable efficient legislative implementation.
(i) Although the CSOS has drafted a template Memorandum of Incorporation (MOI) as a guide for HOA’s established under the Companies Act No. 71 of 2008 and provides a vetting and advisory service for developers and/or home owners wishing to draw up the constitution of an unincorporated HOA’s, new overarching legislation (the “New Legislation’’) should be introduced to provide for a unified and streamlined disputes ,regulatory and management regime for all the Community Schemes as such Schemes are currently defined in the CSOSA;
(ii) Such New Legislation should facilitate the efficient execution of Services by the CSOS by removing and/or substantially reducing the legal and administrative differences and contradictions between the manner in which the various housing regimes and administrative organs established thereunder are regulated; and
(iii) Such overarching New Legislation should enable a unified approach to Community Scheme matters by the courts and the CSOS in order that courts feel legally able to assist the CSOS and in the event it is legally appropriate to do so, order applicants to exhaust the dispute and regulatory provisions of the New Legislation before resorting to potentially costly court litigation.
After having reviewed the Acts and legislative instruments listed in the Terms of Reference as well as regulations issued thereunder, analysed certain court decisions in respect thereof and made the observations above, the following findings have been made in relation to legislation and the effects thereof concerning development schemes known as Enhanced, Extended Discount Benefit Schemes (EEDBS) and Breaking New Ground Schemes (BNGS):
(i) To the extent that EEDBS and /or BNGS development schemes are established inter alia to provided house owners with registered legal title such that their houses and Development Schemes are marketable and fundable, EEDBGS and BNGS will invariably be required to register as Sectional Title Schemes under the Sectional Title Schemes Management Act No. 8 of 2011;
(ii) Such Community Schemes will be subject to the benefits and obligations of the Community Scheme Ombud Service Act No. 9 of 2011 as are all Community Schemes;
(iii) EEDBS and BNGS Development Schemes registered as Sectional Title Schemes, subject to the Sectional Title Schemes Management Act No. 8 of 2011 will be obliged to pay proportionately higher levies than levies payable under other forms of management, notably management under unincorporated or incorporated home owners associations under the Companies Act No. 71 of 2008 or share block schemes under the Share Blocks Control Act No 59 of 1980 (as amended) (the “SBCA”);
(iv) BNGS and EEDBS are forms of social care housing, implemented both to alleviate the huge housing backlog for relatively low-income earners and to enable qualifying beneficiaries to obtain registered and marketable title to immovable real property such that they have access to available and relatively cheap funding;
(v) However, sectional title ownership is relatively expensive and a sustainable means of alleviating the management cost and insurance payable in respect of such social care housing for low-income sectional title owners needs to be considered;
(vi) Although the Community Scheme Ombud Service established under the Community Scheme Ombud Service Act No. 9 of 2011 was created to provide a cost-effective alternative to court action as a means of resolving disputes for all Community Schemes including EEDBS and BNGS, claimants often by-pass the CSOS and prefer direct access to the courts;
(vii) Decisions need to be taken regarding CSOS resources and the appointment of more legally experienced practitioners to encourage claimants to use the Service before resorting to the courts.
(viii) Over- arching legislation should be introduced to reduce the contradictions between the dispute procedures of various housing regimes and those provided by CSOS under the CSOSA;
(ix) Over- arching legislation should be introduced to reduce the contradictions and discrepancies between the management procedures of various housing regimes and those provided under STSMA for registered Sectional Title Schemes; and
(x) Streamlined but progressive legislation ought to be introduced which inter alia will increase the levies payable by higher earning property owners under housing regimes to: 1/ the CSOS (which should primarily concentrate on the preliminary stages of pre-court resolution of disputes in a cost effective and efficient court aligned manner); and 2/ a newly established and centralized professionally resourced housing management and administrative organ.
(xi) The greater levies collected from higher earning income groups could go some way to reducing the levies payable by lower income earners under EEDBS and BNGS.
Legal Report and recommendations prepared by Philip Webster, Solicitor of the Senior Courts of England & Wales.